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Motor Legal Expenses Insurance: What Exactly are you Covered for?

Motor or car insurance accident report form with pen

In June 2013, a review of insurance policy add-ons was carried out by the Financial Conduct Authority (FCA). This review included motor legal expenses insurance (MLEI). Whilst MLEI is popular in take-up for motorists seeking cover for accidents caused by others, the FCA believed this cover was not properly understood.

The FCA worked closely with the British Insurance Brokers’ Association (BIBA) on the review. BIBA chief executive Steve White was concerned that the gravitation towards buying motor insurance online, without taking personalised advice, was resulting in many consumers not being fully informed about how MLEI actually worked.

MLEI: An Attractive yet Sometimes Misunderstood Option

The reforms to the way no win-no fee claims are funded, Mr White suggested, made MLEI even more attractive to motorists not wishing to be left out of pocket should they be involved in an accident that wasn’t their fault. He strongly recommended motorists seeking cover should speak to an insurance broker who would properly explain how MLEI works, and who would arrange a policy to suit their particular needs.

The FCA felt quite a gap existed between what MLEI actually covered and what consumers expected to get out of it, quoting ‘widespread confusion’. Policy wording is set to become clearer, but we believe it’s still vitally important that any type of motor insurance policy – commercial, fleet or private – is adequately tailored to specific needs and that every motorist should receive a clear explanation of precisely what they’re covered for.

MLEI Explained

Motor legal expenses insurance offers legal cover for motorists involved in accidents that are not their fault. It can assist with recovering uninsured losses, for example policy excess, together with out of pocket expenses, car hire and personal injury compensation. The party that caused the accident, or their insurer, is pursued for all of these costs.

Legal cover for accidents where the insured is at fault is usually included as standard in most motor policies.

It is important to be aware that an MLEI insurer will only get involved if there is a likelihood of 51% or more that the insured will receive financial compensation. If there is, then the policy will cover all legal expenses arising from the claim or a series of connected claims. The maximum limit is £100,000.

If you are seeking to protect your vehicles, we’re here to help … and here to fully explain the level of cover you are receiving, including how any add-ons, such as motor legal expenses legal insurance, work. Please get in touch for friendly, tailored advice.

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